BILL ANALYSIS Ó AB 1803 Page 1 Date of Hearing: April 24, 2012 ASSEMBLY COMMITTEE ON HEALTH William W. Monning, Chair AB 1803 (Mitchell) - As Amended: April 23, 2012 SUBJECT : Medi-Cal: emergency medical conditions. SUMMARY : Provides that emergency services and care that are necessary for the treatment of an emergency medical condition are a covered benefit in the fee-for-service (FFS) Medi-Cal program. Specifically, this bill : 1)Adds emergency services and care necessary for the treatment of an emergency medical condition and medical care directly related to the emergency condition and provided on a FFS basis, to the list of covered benefits in the Medi-Cal program. 2)Defines by reference "emergency services and care," "emergency medical condition," and other related definitions which currently apply to a hospital's obligation to screen, treat, and stabilize any patient that presents in an emergency department (ED) without regard to the patient's ability to pay, or insurance status. 3)Specifies that this bill shall not be construed to change the obligation of a Medi-Cal managed care (MCMC) plan to provide emergency services and care. EXISTING LAW : 1)Establishes the Medi-Cal program, administered by the Department of Health Care Services (DHCS), to provide comprehensive specified health care services and long-term care to pregnant women, children, and people who are aged, blind, and disabled. Services are reimbursed through FFS, capitated payments to managed care plans, or other contractual arrangement. 2)Establishes a schedule of benefits under the Medi-Cal program, which includes hospital inpatient and outpatient services, subject to utilization controls, and establishes Medi-Cal hospital reimbursement requirements. AB 1803 Page 2 3)Authorizes DHCS to contract, on a bid or nonbid basis, with any qualified individual, organization, or entity to provide services to, arrange for, or case manage, the care of Medi-Cal beneficiaries. Defines a MCMC plan as any entity that enters into one of several types of contracts with DHCS including County Organized Health Systems, Geographic Managed Care plans, Local Initiatives, and commercial plans. 4)Requires in federal law, under provisions of the federal Emergency Medical Treatment and Active Labor Act (EMTALA), and in state law, hospital ED to provide emergency screening and stabilization services without regard to the patient's insurance status or ability to pay. EMTALA requires hospitals to maintain an on-call roster of specialists in a manner that best meets the needs of its patients. 5)Requires, under state law, a hospital to render emergency care and services without first questioning the patient's ability to pay and defines "emergency medical condition" as a medical condition manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in any of the following: a) Placing the patient's health in serious jeopardy; b) Serious impairment to bodily functions; or, c) Serious dysfunction of any bodily organ or part. 6)Requires hospitals to share proof of Medi-Cal eligibility with other emergency services providers. 7)Requires a health care service plan to reimburse providers for emergency services and care provided to its enrollees, until the care results in stabilization of the enrollee, except as specified. Prohibits, as long as federal or state law requires that emergency services and care be provided without first questioning the patient's ability to pay, a health care service plan from requiring a provider to obtain authorization prior to the provision of emergency services and care necessary to stabilize the enrollee's emergency condition. FISCAL EFFECT : This bill has not been analyzed by a fiscal committee. COMMENTS : AB 1803 Page 3 1)PURPOSE OF THIS BILL . According to the author, this bill would codify the "reasonable layperson standard" for emergency medical services for persons in the Medi-Cal FFS program. The author states that this change will create a uniform policy and ensure that FFS Medi-Cal patients have this important and fundamental patient protection. According to the author, under California law, the reasonable layperson standard for emergency medical services is in place for health plans regulated by the Department of Managed Health Care including MCMC plans. However, the author argues, the standard is not in place for Medi-Cal FFS enrollees and this gap in California law, where no reasonable layperson standard exists, threatens patient safety and needs to be closed. The reasonable layperson standard states that if a reasonable person believes a medical condition is manifested by acute symptoms of sufficient severity (including severe pain) presents itself in a manner, that the absence of immediate medical attention could be reasonably expected to result in harm, the treatment shall be paid by the managed care plan. These conditions include: a) placing the patient's health in serious jeopardy; b) serious impairment to bodily functions; or, c) serious dysfunction of any bodily organ or part. The author is concerned that without this protection for FFS Medi-Cal patients, care rendered in the ED will be subject to after-the-fact review even though it met the reasonable person standard. According to the sponsor, this has occurred in Washington State, which implemented a system to review all FFS claims for medical necessity. Under the Washington system, because the prudent lay person (or reasonable person in California) standard only applied in managed care, but not FFS, all EMTALA screening exams were still required to be covered by managed care plans, but not for FFS visits if it was later determined to not be medically necessary. According to the author, the Washington example shows the danger of not having the reasonable layperson standard in place. The state has identified approximately 500 conditions (final diagnosis codes) they have determined are not emergencies and will no longer cover those conditions based on the final diagnosis codes. 2)BACKGROUND . Medi-Cal is California's version of the federal Medicaid program. Medicaid is a 46-year-old joint federal and AB 1803 Page 4 state program offering a variety of health and long-term services to low-income women and children, the elderly, and people with disabilities. Each state has discretion to structure benefits, eligibility, service delivery, and payment rates under requirements established by federal law. The Medi-Cal program utilizes a variety of service delivery and payment systems. Originally the primary mechanism was FFS Medi-Cal which means that a Medi-Cal enrollee obtains services from an approved Medi-Cal provider who is willing to take him/her as a patient for the service and accepts the Medi-Cal payment rate set by the state and governed by federal law. However, California has adopted the national trend to use various models of managed care in place of FFS in Medi-Cal. In MCMC, as in commercial managed care, the enrollee's choice of providers may be limited to those in the plan's network, but the plan is required to ensure timely access to care. As of August 2011, MCMC in California served about 4.4 million enrollees in 30 counties, or about 60% of the total Medi-Cal population. 3)EMERGENCY MEDICAL SERVICES . There is extensive law regarding a hospital's obligation to provide emergency medical services regardless of ability to pay. Enrollees of a health plan, including a MCMC plan have the protection of the "reasonable person standard." Federal and state law set limits on the reimbursement rate that a MCMC plan is allowed to pay for emergency services provided to a plan enrollee by an out-of-network or noncontracted hospital. There are even requirements on hospitals to share proof of Medi-Cal eligibility with other emergency care and services providers to prevent illegal billing of Medi-Cal enrollees and prohibitions on providers billing a Medi-Cal enrollee directly for covered services. In spite of this extensive law relating to the provision of emergency services in the Medi-Cal program, the sponsor of this bill appears to have identified a significant gap with regard to coverage of emergency medical services in the FFS Medi-Cal program. This bill seeks to cure this by adding emergency medical care and services to the list of covered benefits and by referencing the "reasonable person" standard from other existing provisions. AB 97 (Committee on Budget), Chapter 3, Statutes of 2011, the Health Budget Trailer bill, implemented a mandatory copayment of $50 for nonemergency use of the ED. Pending approval from the Centers for Medicare and Medicaid Services (CMS), DHCS AB 1803 Page 5 planned to implement this copayment in both the FFS and managed care settings (except for Family Planning Access Care Treatment beneficiaries). Hospitals would have been required to collect the $50 copayment from the beneficiaries at the time of service, and the hospital would have been reimbursed the appropriate Medi-Cal reimbursement rate minus the $50 copayment. In June 2011, DHCS submitted a request to CMS to amend the State's Bridge to Reform Waiver to allow DHCS to impose mandatory copayments. On February 6, 2012, DHCS received notice from CMS that this request was not approved as it was not consistent with federal Medicaid requirements. DHCS stated that it disagrees with the CMS decision and is examining its options moving forward, including administrative appeal options. DHCS assumed an October 1, 2012 start date for the imposition of copayments in the State Budget. Therefore, according to DHCS there is some additional time to resolve this matter before the State experiences any savings erosion. 4)SUPPORT . The sponsor, the California Chapter of the American College of Emergency Physician (California ACEP) supports this bill because it is important legislation standardizing the reasonable layperson standard so that all Medi-Cal patients are covered when they seek treatment for an emergency. According to this support, the law currently requires that if a reasonable layperson believes they are having an emergency and they go to the ED, the MCMC plan must pay for the care provided regardless of whether the patient's condition turns out to be less serious than the patient originally feared. California ACEP states that while the reasonable layperson standard had been a long established patient protection in California, efforts to erode this protection are surfacing in other states. The sponsor concludes that given that threat, it is time to close the loophole in California law to protect all Medi-Cal patients. 5)PREVIOUS LEGISLATION . a) AB 1142 (Price), Chapter 511, Statutes of 2009, requires a hospital that obtains proof of a patient's Medi-Cal eligibility subsequent to the date of service, to provide all information regarding that person's Medi-Cal eligibility to all hospital-based providers, ambulance service providers, and other hospital-based providers that AB 1803 Page 6 bill separately for their professional services. Permits DHCS to assess a penalty, up to three times the amount payable by Medi-Cal, against a provider who, despite having proof of Medi-Cal eligibility seeks payment from or fails to cease collection efforts against the beneficiary. b) AB 1203 (Salas), Chapter 603, Statutes of 2008, establishes uniform requirements governing communications between health plans and non-contracting hospitals related to post-stabilization care following an emergency. Prohibits a non-contracting hospital from billing a patient who is a health plan enrollee for post-stabilization services, except as specified. REGISTERED SUPPORT / OPPOSITION : Support California Chapter of the American College of Emergency Physician (sponsor) California Black Health Network Opposition None on file. Analysis Prepared by : Marjorie Swartz / HEALTH / (916) 319-2097